5 Customer Retention Strategies that Actually Work

Over the last few years, there has been a dramatic shift in both the amount of digital marketing channels as well as level of competition for small to medium sized businesses. With large companies driving prices down and customers having more choices than ever before, it can be difficult to create the right retention strategies to reach your audience and keep them coming back to your business.

Ascustomer engagement and retention professionals, we understand the need for sound retention strategies in our current market. In today’s fast paced economy, you no longer have the luxury of trial-and-error, so you need to know your campaign will work the first time through. This is why we have put together these 5 customer retention strategies that have been proven to actually work and can help you take your retention marketing to a whole new level. Let’s take a look.

Why do we need retention strategies?

Although you may have heard that there is a need for retention strategies, unless your own business has struggled in this regard, it can be hard to comprehend. However, the numbers don’t lie when it comes to this need. For example, only32% of customers will make a second purchase after one year. That’s two-thirds of your audience that is walking out the door.

On top of that, these customers are actually easier to sell to than first time customers, with some reports claiming it is anywhere from3 to 12 times simpler to resell existing customers. Additionally, a 5% increase in retention canincrease profits by up to 95%. Not only do these stats show the importance of customer retention, but they may even make you wonder why you haven’t been focusing on this before.

Now that you have a better understanding of the need for these retention strategies, let’s look at 5 tactics for improving customer retention andreducing customer churn.

1. Make a good first impression with onboarding

The first of our retention strategies focuses on one of the largest areas of customer churn: the onboarding process. Unless you have a sound strategy in place, up to as much as75% of your customers will be gone within the first week and by the end of the first month only 4% of customers will have stuck around. This is obviously a huge problem. However, with the right tools and focus, you can make a last first impression that keeps them around.

The important area you want to focus on here is avoiding creating roadblocks that hinder your customers’ progress. These might include asking too many questions, requesting too much responsive action too soon, and many other annoyances that might lead customers to churn. Typically, by referring to youruser engagement metrics, you will be able to identify and target the specific areas where customers are dropping off. Once you get over this first hurdle, your retention strategy will already be greatly improved.

2. Guide customers through the process

Now, what often happens when businesses start to employ retention strategies focused on onboarding is that they forget to take care of customers further through the process. Instead, you should treat each are of the process like onboarding and always be aware of where your customers find themselves and how you can improve their experience.

A powerful way to do this is withmarketing automation and SMS. By establishing triggers and touchpoints along the customer journey, you can deliver tailored messaging and content directly to your customers in order to keep them engaged and remind them of why they came to you in the first place. Through a multi-channel approach, customers will be less likely to churn and may even make more repeat purchases.

3. Empower customers to meet their full potential

As you help guide customers through their journey, it is up to you to give them the tools they need to reach their full potential when working with your company. Without your intervention, customers may come and go without ever realizing all the capabilities of your product. Ideally, this should never happen, but unless you are actively pursuing arelationship with them, they will fall through the cracks.

Depending on the type of business you have, there will be a few different ways you can do this. For instance, customer-facing businesses that rely on repeat visits or purchases have found thatcustomer loyalty programs can help their customers to discover new areas they might not have found previously. The important part is that you find what your customers love most about their experience working with you and then do your best to improve that experience whenever possible.

4. Never give up

Now, you may believe that the customer journey ends when a client churns. However, as long as they are still receptive to your brands messaging, there is always a chance to win them back with targeted retention strategies. By never letting go and pursuing these customers persistently and respectfully, you can win back customers that others would have let go.

For example, I still receivedwin-back campaigns from Blue Apron and Dollar Shave Club. While I only used each of their services for a short time, I still receive monthly emails letting me know about the latest deals. While some might see this as annoying, I know that if I ever wanted to join their program again, I could very easily do so. By keeping yourself within arm’s reach, you make yourself accessible to these customers and who knows, they might be looking for that extra nudge in the right direction.

5. Measure twice, cut once

As we mentioned earlier, you should always be measuring the success of your retention strategies in order to analyze them and learn how to better treat your audience. It goes back to an old saying my grandfather had: Measure twice, cut one. If you can consistently trackuser engagement and analytics, you can create better campaigns that lead to higher success rates.

However, this is often easier said than done. In order to get the measurements you need, you will want to map out your customer journey and pinpoint areas where analytics can be taken so that you can continue to improve. If you are just starting your campaign, building in these tools from the ground up will do wonders for you in the future, so make sure to keep this in mind.

Overhauling the entire campaign

At this point, you can see that each of these retention strategies should be used in combination with each other for a fully optimized campaign. Unless you have already put these strategies into place yourself, this will call for a complete overhaul of the entire campaign. That being said, you shouldn’t worry about this. In fact, you are likely due for an overhaul.

Thankfully, now that you have these retentions strategies in your tool belt, you are well on your way to retaining more customers, creating better customer engagement, and offering an exceptional customer experience. From there, the rest is up to you.